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Double dip recession is a possibility, says economist

The UK could experience a ’double dip recession’ if the Bank of England discontinues quantitative easing measures, one specialist has claimed.

Senior economist at the Institute of Public Policy Research Tony Dolphin explained that Britain is not yet out of the downturn and so withdrawing this support could therefore be damaging.

He remarked: ’I think that is a risk. We haven’t actually recovered and we are worrying about what happens afterwards.’

Despite this, Mr Dolphin added, it should not be a serious cause for concern as the Bank of England seems to be ’in it for the whole haul’.

According to the expert, the financial sector is not currently strong enough to bring about a recovery on its own and a lack of lending and borrowing is only exacerbating the problem.

His comments follow a speech made by Adam Posen, an external member of the Bank of England’s Monetary Policy Committee, who stated that it is difficult for the private sector to drive the upturn when monetary institutions are troubled.

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